Flood v Times Newspapers Ltd (No 2)

JurisdictionEngland & Wales
JudgeLord Neuberger,Lord Mance,Lord Sumption,Lord Hughes,Lord Hodge
Judgment Date11 April 2017
Neutral Citation[2017] UKSC 33
Date11 April 2017
CourtSupreme Court

[2017] UKSC 33

THE SUPREME COURT

Hilary Term

On appeals from: [2014] EWCA Civ 1574, [2016] EWHC 397 (QB) and [2016] EWHC 855 (Ch)

before

Lord Neuberger, President

Lord Mance

Lord Sumption

Lord Hughes

Lord Hodge

Times Newspapers Limited
(Appellant)
and
Flood
(Respondent)
Miller
(Respondent)
and
Associated Newspapers Limited
(Appellant)
Frost and others
(Respondents)
and
MGN Limited
(Appellant)

Appellant (Times Newspapers Ltd)

Richard Rampton QC

Ms Kate Wilson

(Instructed by Bates Wells & Braithwaite LLP)

Appellant (Associated Newspapers Ltd)

Gavin Millar QC

Ben Silverstone

(Instructed by Reynolds Porter Chamberlain LLP)

Appellant (MGN Ltd)

Lord Pannick QC

Jamie Carpenter

(Instructed by Reynolds Porter Chamberlain LLP)

Respondent (Flood)

James Price QC

William Bennett

(Instructed by Edwin Coe LLP)

Respondent (Miller)

William McCormick QC

James Laughland

(Instructed by Simons Muirhead and Burton)

Respondents (Frost and ors)

Hugh Tomlinson QC

Simon Browne QC

Jeremy Reed

(Instructed by Atkins Thomson)

Heard on 24, 25 and 26 January 2017

Lord Neuberger

(with whom Lord Mance, Lord Sumption, Lord HughesandLord Hodgeagree)

1

Each of these three appeals involves a challenge to an order for costs made by a High Court judge against a newspaper publisher after a trial. In two of the appeals, Flood v Times Newspapers Ltd and Miller v Associated Newspapers Ltd, the trial involved an allegation that the newspaper had libelled the claimant; in the third appeal, Frost and others v MGN Ltd, the trial involved allegations that the newspaper had unlawfully gathered private information about the claimants by hacking into their phone messages. In each case, the newspaper publisher lost and was ordered to pay the claimants' costs, and in each case the newspaper publisher contends that the costs order infringes its rights under article 10 of the European Convention on Human Rights. In Flood v TNL, the newspaper publisher also argues that the order for costs made against it was outside the ambit of what a reasonable judge could have decided.

2

In all three cases, the proceedings against the newspaper publisher had been brought by claimants who were able to take advantage of the costs regime introduced by the Access to Justice Act 1999 and reflected in the provisions of the relevant Civil Procedure Rules then in force, in particular CPR 44. It is the provisions of this regime ("the 1999 Act regime") which found the basis of the contention that article 10 is infringed. The 1999 Act regime has now been largely replaced by a new regime, and, although the new regime has no bearing on the awards of costs in the present cases, it is of some relevance to the issues which have to be considered. Accordingly, I shall start by briefly describing the 1999 Act regime and its aftermath. I will then summarise the facts of each case before turning to the issues. I will deal first with the article 10 issues which apply in all three cases, and I will finally discuss the issue specific to Flood v TNL, which turns on its own facts.

The 1999 Act regime and its aftermath

The 1999 Act regime, Callery v Gray and Campbell v MGN

The 1999 Act regime and its aftermath
3

Around 20 years ago, the government decided to curtail the availability of civil legal aid very substantially, and it appreciated that in order to do so a new system had to be introduced if people who were not particularly well off financially were to be able to enjoy access to legal advice and representation. After some, if limited, consultation, the government introduced a Bill into Parliament which became the 1999 Act. That statute severely cut down the availability of legal aid in the field of civil law and introduced the 1999 Act regime instead.

4

The 1999 Act regime was described in a little detail in the leading judgment of this Court in Lawrence v Fen Tigers Ltd (No 3) [2015] 1 WLR 3485, paras 12–25, and its background is more fully explained in paras 65–69 of that judgment. In essence, under the 1999 Act and the rules made thereunder, a claimant could bring proceedings on terms which involved (i) the claimant's lawyers agreeing under a conditional fee agreement (a "CFA") to be paid nothing if the claim failed, but to be entitled to receive up to twice their normal rates if the claim succeeded, and/or (ii) the claimant taking out so-called after-the-event ("ATE") insurance against the risk of his having to pay the defendant's costs (and on terms that the insurer was only paid if the claim succeeded), and (iii) the claimant being able to recover from the defendant the "success fee", payable under the CFA, and the premium payable in respect of the ATE insurance, as part of his costs if his claim succeeded.

5

The 1999 Act regime was considered by the House of Lords in two cases, Callery v Gray (Nos 1 and 2) [2002] 1 WLR 2000, and Campbell v MGN Ltd (No 2) [2005] 1 WLR 3394. In the former case, which involved a successful personal injury claim, the defendant challenged the level of success fee and the ATE premium which had been held to be recoverable by the claimant, in circumstances where the level of success fee had been reduced by the Court of Appeal. It was said that the success fee was too high and that the ATE insurance had been taken out prematurely. Both arguments failed. However, while accepting that the system introduced by the 1999 Act improved access to justice for claimants, all members of the panel were plainly concerned about the possibility of abuse of the 1999 Act regime.

6

In Campbell (No 2), the newspaper publisher, MGN, which had lost a privacy infringement claim and had been ordered to pay Ms Campbell's costs, contended that "they should not be liable to pay any part of the success fee on the ground that, in the circumstances of this case, such a liability is so disproportionate as to infringe their right to freedom of expression under article 10 of the Convention" — para 6, per Lord Hoffmann. In para 22, he explained that this argument was based in part on the disproportionality of the level of costs bearing in mind what was at stake in the litigation, and in part on the fact that the particular claimant did not need to fund the litigation with the benefit of a CFA and ATE insurance. Lord Hoffmann then proceeded to reject both contentions in paras 23–28, and made the point that the 1999 Act regime had to be considered as a whole, because "concentration on the individual case does not exclude recognising the desirability, in appropriate cases, of having a general rule in order to enable the scheme to work in a practical and effective way" (para 26). However, he went on to express considerable reservations about the level of recoverable costs engendered by the 1999 Act regime in relation to claims against the press.

The Jackson Review, the Leveson Inquiry, and subsequent legislation
7

The concern about the 1999 Act regime expressed in those two cases had started to become widespread by the time Campbell (No 2) was decided. In 2008, the then Master of the Rolls, Sir Anthony Clarke, asked Sir Rupert Jackson to investigate the costs of civil litigation, and this resulted in the Review of Civil Litigation Costs: Final Report (December 2009), which was published in 2010. In the Review, Sir Rupert was very critical of the 1999 Act regime, and proposed substantial changes, most of which have now been implemented by and pursuant to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 ("LASPO"), and which (as a broad generalisation) apply to proceedings begun after 1 April 2013. However, some of his proposals have not been adopted, although it is clear that the implementation of a new regime to replace the 1999 Act regime is still work in progress.

8

Some of the principal changes to the 1999 Act regime effected by LASPO did not apply to defamation and privacy claims — see article 4 of the LASPO (Commencement No 5 and Saving Provision) Order 2013 ( SI 2013/77). Thus, such claims are now an exception to the general rule which excludes the recoverability of success fees and ATE premiums by successful claimants. (The only other current exception is mesothelioma claims). This was justified by the fact that such claims would be covered by other legislation. Another recommendation made by Sir Rupert, namely qualified one-way costs shifting, has also been introduced, but only to a limited extent, in that it only extends to personal injury claims, and therefore does not apply to defamation or privacy claims.

9

However, certain changes introduced following Sir Rupert Jackson's "Review" do apply to defamation and privacy cases. They include more muscular case management by the courts to deal with cases proportionately, costs budgeting and costs management, which involve the parties and the court controlling the level of recoverable costs at the start of the proceedings (see CPR 3.12(1)), costs-capping (by virtue of PD 3F para 1), and new provisions which limit the level of overall recoverable costs to what is proportionate (pursuant to CPR 44.3(2)(a)).

10

There are two other statutes which should be mentioned in the present context. The Defamation Act 2013 contained provisions which afforded a degree of substantive protection to potential defendants in defamation actions; however, that statute did not deal with costs. The Crime and Courts Act 2013 ("the CCA 2013") on the other hand did concern itself with costs (among many other issues). The CCA 2013 was enacted in part to give effect to the recommendations of Sir Brian Leveson in his An Inquiry into the Culture, Practices and Ethics of the Press (November 2012) (HC 780). Section 40 of the CCA 2013 (which is not in force) provided that if a newspaper publisher became a member of an approved press regulator, it would have a measure of protection against an adverse costs...

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1 firm's commentaries
  • The Supreme Court Decision In Flood, Miller And Frost: A Claimant Lawyer's Perspective
    • United Kingdom
    • Mondaq UK
    • 13 October 2017
    ...is with the Supreme Court's decision in Times Newspapers Ltd v Flood, Miller v Associated Newspapers Ltd, and Frost and others v MGN Ltd [2017] UKSC 33. The Court declined to decide between its decision in Campbell v MGN (No. 2) [2005] UKHL 61 (upholding CFAs in media cases) and MGN v UK 39......

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